GST rollout Parliament session: Ahead of the grand Goods and Services Tax launch, Finance Minister Arun Jaitley on Friday said, "This is an important moment in the journey of a nation. We are in the process of making history."
GST rollout Parliament session: Ahead of the grand Goods and Services Tax launch, Finance Minister Arun Jaitley on Friday said, “This is an important moment in the journey of a nation. We are in the process of making history.” At a special midnight Parliament session organised for the launch of GST, Jaitley said, “At the midnight hour, we will be launching India’s most ambitious economic reform. GST may be a destination tax, but it will begin a journey to India. At midnight, India will awake to limitless possibilities.”
Indicating that with GST a new India will be born, Jaitley said, “The Old India was economically fragmented, the New India has one tax, one market. This is an India where the Centre and states work together on a common goal of shared prosperity.” “This new India will write a new destiny,” Jaitley said.
The Narendra Modi government has organised a special midnight session of the Parliament for the launch of GST. The session has been boycotted by several Opposition parties, including Congress. President Pranab Mukherjee will launch the new tax at the “stroke of the midnight hour”. In a historic moment for the country, the Goods and Services Tax rolls out on July 1, 2017.
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Said to be the biggest indirect tax reform of independent India – referred to as ‘One Nation, One Tax’ reform – GST subsumes multiple taxes and is aimed at simplifying the tax regime in the economy. With GST coming into effect, all central – and state-level taxes and levies on goods and services get be subsumed within an integrated tax. GST introduces a four-tier tax structure in the economy – five, twelve, eighteen and twenty-eight per cent tax rates.
Vegetables, food, fresh fruits, cereals and flour have been exempted from GST. A list of 89 products has been released by the government where the incidence of tax under GST is lower compared to the present tax incidence. This includes food and beverages, medical and health, household goods of daily use, educational, clothing and footwear and fuel. Items such as toothpaste, soaps and hair oils will see a 6% reduction in the tax rate.
There is no significant rate movement tea and coffee powders, sugar and dairy products. Eating out may become more expensive if you dine in air-conditioned restaurants. While small restaurants would pay 5% tax, non-air-conditioned restaurants would pay 12%, air conditioned restaurants would pay 18% and restaurants at 5-star hotels would pay 28%. The general consensus view is that bulk of services – mobile phone bills, insurance premiums, banking services – will get dearer.